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Introduction of stock exchange

A Stock Exchange is the place where investors go to buy/sell their shares Once a company's public offering is complete, it gets listed in a stock exchange. After listing it would be available for trading to all investors in the stock exachanges where they are listed. In India we have two major stock exchanges. They are: 1. The National Stock Exchange (NSE) 2. The Bombay Stock Exchanges (BSE)

National Stock Exchange: Assimilated in November 1992, the National Stock Exchange of India (NSE) was a tariff forfeiting association. The NSE is India's largest and the worlds third largest stock exchange in terms of Transaction volumes & amounts. The NSE is based out of Bombay. The NSE has set up its trading platform as a nation-wide, fully automated screen based system. This enables anyone in any part of the country to trade on shares listed in the NSE.

Bombay Stock Exchange: The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It is the third largest stock exchange in south Asia and the tenth largest in the world. BSE has over 5000 companies that are listed in it. The objectives of the BSE are similar to that of the NSE. BSE also uses the latest technologies in the IT field to provide a single place where traders from across the world can buy/sell shares in the Indian share market. BSE is well known as the oldest stock market in Asia and was initially known as 'The Native Share & Stock Brokers Association.' Incorporated in 1875, BSE became the first certified exchange in India. The exchange is an investor's hub with over 5000 listed companies.

Meaning of stock exchange


Stock exchange market refers to an organized market where govt. Securities and shares, bonds and debentures of the benefited trading units are regularly transacted. Its business is carried on with in a particular building in which a person can easily convert his shares into cash or new securities. Thus it is a market for the exchange of transfer able securities by providing a continuous market. The term stock exchange is referred by some people to stat Market. Therefore some writer says, "It is a place to get rich quick while others regard as place of gambling.The securities of public companies can be transacted in the exchange only if they have been approved by the committee of the stock exchange.
Stock exchange (also called stock market or share market) is one important constituent of capital market. It is an organized market for the purchase and sale of industrial and financial security. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations. It performs various functions and offers useful services to investors and borrowing companies. It is an investment intermediary and facilitates economic and industrial development of a country.

Defination:1) According to Husband and Dockerary "stock exchanges are privately organized markets which are used to facilitate trading in securities".

(2) The Indian Securities Contracts (Regulation) Act of 1956 defines stock exchange as "an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business in buying, selling and dealing in securities".

Features of stock exchange


1. Market for securities : Stock exchange is a market, where securities of corporate bodies, government and semi-government bodies are bought and sold. 2. Deals in second hand securities : It deals with shares, debentures bonds and such securities already issued by the companies. In short it deals with existing or second hand securities and hence it is called secondary market. 3. Regulates trade in securities : Stock exchange does not buy or sell any securities on its own account. It merely provides the necessary infrastructure and facilities for trade in securities to its members and brokers who trade in securities. It regulates the trade activities so as to ensure free and fair trade 4. Allows dealings only in listed securities : In fact, stock exchanges maintain an official list of securities that could be purchased and sold on its floor. Securities which do not figure in the official list of stock exchange are called unlisted securities. Such unlisted securities cannot be traded in the stock exchange. 5. Transactions effected only through members : All the transactions in securities at the stock exchange are effected only through its authorised brokers and members. Outsiders or direct investors are not allowed to enter in the trading circles of the stock exchange. Investors have to buy or sell the securities at the stock exchange through the authorised brokers only. 6. Association of persons : A stock exchange is an association of persons or body of individuals which may be registered or unregistered. 7. Recognition from Central Government : Stock exchange is an organised market. It requires recognition from the Central Government. 8. Working as per rules : Buying and selling transactions in securities at the stock exchange are governed by the rules and regulations of stock exchange as well as SEBI guidelines. No deviation from the rules and guidelines is allowed in any case. 9. Specific location : Stock exchange is a particular market place where authorised brokers come together daily (i.e. on working days) on the floor of market called trading circles and conduct trading activities. The prices of different securities traded are shown on electronic boards. After the working hours market is closed. All the working of stock exchanges is conducted and controlled through computers and electronic system. 10. Financial Barometers : Stock exchanges are the financial barometers and development indicators of national economy of the country. Industrial growth and stability is reflected in the index of stock exchange. 11. 1. Specialized market. Stock exchange is a specialized market for the purchase and sale of
industrial and financial securities. 2. Rigid rules. There are large number of buyers and sellers who conduct their activities according to rigid rules. 3. Basis of formation. Its activities are controlled by the company ordinance in our country. It can be formed as company limited by guarantee or company limited by shares.

12.

Price Transparency
y A stock exchange allows all of the traders to see the current stock price posted in "real time" pricing. This means that it takes into account all stock sales and trades rapidly to reflect the accurate current price based on demand. Stock investors may have advantages over others based on research they have done or their own valuation of the stock. However, they will not have a more updated official price than their trading partners.

Clearing Firm
y When making a trade on a stock market, it might appear that you are making a trade directly with another party. Instead, trades are made using rated financial institutions known as clearing firms, according to informedtrades.com. Technically, the clearing firm purchases the stocks from both parties and transfers both the stock and the money involved. This is designed to ensure that neither party misleads the other about its ability to complete the trade.

Regulations
y There are rules about how a trade must be conducted in each specific stock market. Stock markets also have rules about which stocks may be traded and which traders are permitted to trade on the exchange. Stock exchanges usually have regulatory bodies to handle disputes that occur on the trading floor. If an offense is severe enough, a trader may be banned from trading.

Liquidity
y Investors are limited in the number of company shares they can trade in a single transaction. This rule is designed to protect the liquidity of the stock. The regulating body for each particular stock exchange handles any complaints regarding liquidity of a stock transaction, according to informedtrades.com.

Functions

1.Raising capital for businesses The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public. 2.Mobilizing saving for investment When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in a stronger economic growth and higher productivity levels and firms. 3.Facilitating company growth Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. 4.Redistribution of wealth Stocks exchanges do not exist to redistribute wealth. However, both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses. 5.Corporate governance By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors). However, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies (Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), or Parmalat (2003), are among the most widely scrutinized by the media).

6.Creating investment opportunity of small investor As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors. 7.Govt. capital- raising for development project Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature. 8. Barometer of the economy At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.

Other functions of the stock exchange market as an organization are:


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To guarantee the legal and economic security of the agreed contracts. To provide official information about the quantities that are negotiated and of the quoted prices. To fix the prices of the securities according to the fundamental law of the offer and the demand.

Specifying a bit more and centering on the two main agents that intervene in the market, investors and companies, we could do the following classification:

history of stock exchange market


History of the Indian Stock Market - The Origin One of the oldest stock markets in Asia, the Indian Stock Markets have a 200 years old history. 18th Century 1830's 1840's 1850's 1860's 1860-61 East India Company was the dominant institution and by end of the century, busuness in its loan securities gained full momentum Business on corporate stocks and shares in Bank and Cotton presses started in Bombay. Trading list by the end of 1839 got broader Recognition from banks and merchants to about half a dozen brokers Rapid development of commercial enterprise saw brokerage business attracting more people into the business The number of brokers increased to 60 The American Civil War broke out which caused a stoppage of cotton supply from United States of America; marking the beginning of the "Share Mania" in India The number of brokers increased to about 200 to 250 A disastrous slump began at the end of the American Civil War (as an example, Bank of Bombay Share which had touched Rs. 2850 could only be sold at Rs. 87)

1862-63 1865

Pre-Independance Scenario - Establishment of Different Stock Exchanges 1874 1875 1880's 1894 1880 - 90's 1908 1920 1923 1934 1936 1937 With the rapidly developing share trading business, brokers used to gather at a street (now well known as "Dalal Street") for the purpose of transacting business. "The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock Exchange") was established in Bombay Development of cotton mills industry and set up of many others Establishment of "The Ahmedabad Share and Stock Brokers' Association" Sharp increase in share prices of jute industries in 1870's was followed by a boom in tea stocks and coal "The Calcutta Stock Exchange Association" was formed Madras witnessed boom and business at "The Madras Stock Exchange" was transacted with 100 brokers. When recession followed, number of brokers came down to 3 and the Exchange was closed down Establishment of the Lahore Stock Exchange Merger of the Lahoe Stock Exchange with the Punjab Stock Exchange Re-organisation and set up of the Madras Stock Exchange Limited (Pvt.) Limited

led by improvement in stock market activities in South India with establishment of new textile mills and plantation companies 1940 1944 1947 Uttar Pradesh Stock Exchange Limited and Nagpur Stock Exchange Limited was established Establishment of "The Hyderabad Stock Exchange Limited" "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and Shares Exchange Limited" were established and later on merged into "The Delhi Stock Exchange Association Limited".

meaning of national stock exchange


The National Stock Exchange of India (NSE) is India's largest securities exchange in terms of daily trade numbers. It offers automated electronic trading of a variety of securities, including equity, corporate debt, central and state government securities, commercial paper, CDs, and exchange traded funds. The exchange has more than 1,000 listed members. Owned by more than 20 different financial and insurance institutions, NSE specializes in three market segments: wholesale debt, capital market (automated screen-based trading system), and futures and options (derivatives, the largest segment of the exchange). NSE started operations in 1994. The National
Stock Exchange of India (NSE) is one of the most important and most advanced stock markets in India, and, in terms of transactions, it is the third largest stock exchange in the World. The NSE India is situated in Mumbai, the financial capital of India. On December 31, 2005, the NSE VSAT terminals (2799 in total) spanned over 320 cities in India. The NSE introduced the first Indian clearing corporation, "National Securities Clearing Corporation Ltd.", the first depository of India, National Securities Depository Limited.

Defination:

Advantages of national stock exchange


Advantages of NSE over other stock exchanges NSE makes the possibility of a nationwide integrated stock trading exhange a reality. NSE has enabled to streamline intermarket operations and has made securities accessible across the country, thus leading to price uniformity for traders.. NSE has a fully computerised network in place that make the operations more efficient and transparent. Order-driven market mechanism NSE operates on a purely order-driven market mechanism. The technology that NSE has adopted ensures this. The price changes on NSE immediately reflect the effect of the latest trade in real time. This is at par with the major stock exchanges in the world and worlds ahead of nontechnology driven exchanges. NSE Technology NSE has leveraged the latest technology to give it the competitive advantage. Using VSAT technology NSE has the participation of 320 Indian cities. Trading members can log into the NSE network from any place in India. NSE is the largest VSAT based Stock exchange in the world enabling it to process up to 6 million transactions per day. That works out to 1.6 lac transactions per second! Internet trading Since the past few years, a trader can trade on the Internet. Internet trading takes place through order routing systems, that route client orders to exchange trading systems for execution. If you want to do Internet based trading you will have to open a DMAT account with a SEBI registered broker. Stock Indices - how to judge market movements Stock Indices can tell you how the overall market is doing as well as how a particular sector of the economy is doing. NSE has the following indices to enable the investor to glean sector-wise information S&P CNX Nifty CNX Nifty Junior CNX IT Bank Nifty CNX 100

The ways Indices are calculated differ. For example the CNX 100 The CNX 100 Index has a base date of Jan 1, 2003 and a base value of 1000. CNX 100 is calculated using the market capitalization weighted method; the level of the index reflects the total market value of all the stocks in the index in relation to a particular base period. The S&P CNX Nifty is the main index owned by the NSE. It covers 22 sectors of the economy and is composed of fifty companies. Apart from indicating how the stock market is doing, it also benchmarks fund portfolios and derivatives.

Retail Debt Market NSE has introduced a trading facility through which retail investors can buy and sell government securities from different locations in the country through registered NSE brokers and their sub brokers in the same manner as they have been buying and selling equities. This market is known as "Retail Debt Market" of NSE. Government Securities : Government securities are debt instruments issued by Reserve Bank of India on behalf of the Government of India and is known as G-Secs or Gilts. A government security is direct obligation of the Central Government carries its full backing and is also known as Sovereign Debt. The payment of regular interest and the repayment of face value are assured by the Central Government through the Reserve Bank of India. Once issued, these are traded in the secondary market. Most of the trading in the Government Securities takes place on the wholesale basis in the inter-bank market. The major market participants are banks and financial institutions, mutual funds, insurance companies, primary dealers, provident funds, trusts and individuals. Most of these participants actively trade in government securities due to their statutory requirements. Prior to introduction of NSE's Retail Debt Market in January 2003, government securities were not available for purchase and sale to the retail investors.

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Role of national stock ecxhange


Capital occupies a position so dominant to the economic theory of production and distribution that it is natural to assume that it should occupy at least an equally important place in the theory and practice of economic growth. The subject whether approached historically or analytically or from the standpoint of policy, it is the process of capital accumulation that occupies the front of the stage. It is usually implied that economic growth and capital accumulation with a high positive and significant correlation and additions to the stock of capital can provoke and facilitate faster rate of growth even under the circumstances which can be described as shortage of capital. The aforesaid correlation between the process of economic growth and capital accumulation inspired the earlier theorists of economic development and even in the works of modern economists output is still assumed to be limited by capital whether there is abundant labour or not. A high rate of capital formation usually results in rapid growth in the production and income, but more capital formation by itself will not bring a corresponding acceleration in the growth of production. It also depends to a large extent on the manner in which the capital is utilized. Capital market means the market for all the financial instruments, short term and long term as also commercial, industrial and government paper. The capital market deals with capital. The capital market is a market where borrowing and lending of long term funds takes place. Capital markets deal in both debt and equity. The governments both central and state raise money in the capital market, through the issue of government securities. Capital markets refer to all the institutes and mechanisms of raising medium and long-term funds, through various instruments available like shares, debentures, bonds etc. Corporate both in the private sector as well as in the public sector raise thousands of crores of rupees in these markets. The government, through Reserve Bank of India, as well as financial institutions also raise a lot of money from these markets. Example of a welldeveloped markets are The Global depository and American depository. There are two important operation carried on in these markets: 1. The raising the new capital 2. Trading in securities already issued by the companies. The important constituents of the capital market are: 1. 2. 3. 4. 5. 6. 7. 8. The stock exchanges Banks The investment trusts and companies Specialised financial institutions or development banks. Mutual funds Post office saving banks Non banking financial institutions International financial investors and institutions.

The supply in this market comes from saving from different sectors of the economy. These come from the following sources:

1. 2. 3. 4. 5. 6. 7.

Individuals Corporates Governments Foreign countries Banks Provident funds Financial institutions.

Moreover the establishment of National Stock Exchange and Bombay Stock Exchange has been turning point in the working of capital markets. Recently the RBI has allowed participation of individuals in the government securities markets. This move is likely to open new avenues for investment to individuals. Moreover the Finance Ministry has announced the removal of income tax on dividend in the hands of the receiver and no capital gains tax on investments made in equity after 1.3.03 and held for one year.

CONCEPT OF STOCK EXCHANGE

The Stock Exchanges in India as elsewhere have a vital role to play in the development of the country in general and industrial growth of companies in the private sector in particular and helps the Government to raise internal resources for the implementation of various development programmes in the public sector. As a segment of the capital market it performs an important function in mobilizing and channelising resources which remain otherwise scattered. Thus the Stock Exchanges tap the new resources and stimulate a broad based investment in the capital structure of industries. A well developed and healthy stock exchange can be and should be an important institution in building up a property base alongwith a socialist in India with broader distribution of wealth and income. Thus Stock Exchange is a vital organ in a modern society. Without a stock exchange a modern democratic economy cannot exist. The system of joint stock companies financed through the public investment as emerged has put the vast means of finances almost to enterpreneurs' needs. Finance from external sources mainly from the investing public can become possible only when an institute like Stock Exchange provides opportunities for the conversion of scattered savings into profitable investments with the promises of a reasonable yield and minimum element of risk. Such a mechanism as provided by Stock Exchanges is not merely a source of capital but also a conduit which channelises the savings into investment alongwith a free movement of capital.

The Stock Exchange comes close enough to a perfectly competitive market allowing the forces of demand and supply a reasonable degree of freedom to operate as compared to other markets specially the commodity markets. This segment of the factor market can be considered as a perfect or a nearly perfect market. Apart from providing a mechanism for transacting business in stock and shares it generates genuine potential for a new entrepreneur to take up initiative in the private sector enterprises and allows the expansion of investing community by offering gainful development of their otherwise sluggish or shy capital. The Stock Exchange must assume the responsibility of protecting the rights of investors specially the small investors in the Joint Stock Companies.

THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000. NSE's Mission NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of: 1. Establishing a nation-wide trading facility for equities, debt instruments and hybrids, 2. Ensuring equal access to investors all over the country through an appropriate communication network, 3. Providing a fair, efficient and transparent securities market to investors using electronic trading systems, enabling shorter settlement cycles and book entry settlements systems, and 4. Meeting the current international standards of securities markets. 5. The standards set by NSE in terms of market practices and technologies have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It's that force which is guiding the industry towards new horizons and greater opportunities. Corporate Structure of NSE NSE is one of the first de-mutualised stock exchanges in the country, where the ownership and management of the Exchange is completely divorced from the right to trade on it. Though the impetus for its establishment came from policy makers in the country, it has been set up as a public limited company, owned by the leading institutional investors in the country. From day one, NSE has adopted the form of a demutualised exchange - the ownership, management and trading is in the hands of three different sets of people. NSE is owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries and is managed by professionals, who do not directly or indirectly trade on

the Exchange. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework. The NSE model however, does not preclude, but in fact accommodates involvement, support and contribution of trading members in a variety of ways. Its Board comprises of senior executives from promoter institutions, eminent professionals in the fields of law, economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI and one full time executive of the Exchange. While the Board deals with broad policy issues, decisions relating to market operations are delegated by the Board to various committees constituted by it. Such committees includes representatives from trading members, professionals, the public and the management. The day-to-day management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff. Distinctive Features of NSE NSC is able to radically transform the Indian Capital market during the decade of its existence. It has changed the mindset of all market players and has built investor confidence in the secondary markets. "The NSE is different from most other stock exchanges in India where membership automatically implies ownership of the exchange. The ownership and management of NSE have been totally delinked from the right of trading members. This pattern has been adopted. Since broker owned stock exchanges are also broker managed there is a clear conflict of interest. This is a structurally unstable model, as it inevitably leads to emergence of power groups, and investor interests invariably take a back seat. Management Structure The NSE has tried to benefit from the long experience and expertise of its trading members in their advisory capacities. It Board of Directors does not have any representative of brokers. The Executive Committee, which is concerned with the management of the exchange, has four brokers nominated by the board to reflect different types of interests in the market. But the exchange has appointed different committees to advise in areas such as best market practices, settlement procedures and risk containment systems. Securities industry professional and trading members man these committees and NSE staff concerned with respective areas of exchange operations also participate in them. The day-tday management of NSE is delegated is delegated to the Managing Director who is supported by a team of professional staff. Introduction of Technology Initiatives Stock exchanges today have to rely increasingly on information technology to stay competitive in delivering services. This is primarily because of newer trading channels used for communicating and transacting like Internet and On-line security trading.

The IT department of NSE employs 150 IT professionals forming a third of its total staff strength. The exchange has invested close to Rs.400 Crores in computers, software and communication equipment. It is therefore recognized as one of "Top IT User" organizations. In line with global trends NSE is structured and operates much like an information technology company. It has the largest VSAT network in this part of the world with a huge and complex web of hardware and software. It has a detailed disaster recovery site that mirrors all operating systems. The NSE has set up its own Internet Webster, which is visited daily by four Lakh persons Stock Exchange Technology The modern stock exchange technology does not need the traditional type of brokers to match investors' orders as they used to do on the physical-trading floor. The automated Trading screens can match buy and sell orders without the intervention of brokers. Today brokers are needed only for settlement responsibilities. NSE introduced a nation-wide VSAT driven screen based trading system. Operations commenced in Mumbai and rapidly spread all over India. NSE today offers investors trading facilities in over 280 cities and town through 4000 terminals. For the first time NSE introduced in India screen based trading with automated matching. The system conceals the identity of the parties to an order or trade. This help better functioning of the market as disclosures of identity would put most members at a disadvantage. The trading system operates on price time priority. This means given the same set or orders, the orders that come first receive priority in matching. When an order does not find an immediate match in remains in the system and is displayed to the whole market, till a fresh order comes in or the earlier order is modified or cancelled. The market screens at any point of time give the members complete information on the total order depth in a security, the high price, the low price, the last traded price and other related information. Nationwide Trading Facility Nationwide Trading system of NSE has immensely benefited investors in all places, which do not have a stock exchange nearby. Earlier their orders took three days for confirmation. This time lag is now a thing of the past, as the orders and prices are visible and instantly available to all investors across the country, representing a dramatic change in investor access and protection. This has served to unify the earlier fragmented market into a single national order book, bringing with it unprecedented increases in liquidity and transparency. Risk Containment Measures -Investors freed from Counterparty Risks NSE introduced risk containment measures like mark to market margins, exposure limits etc., bringing enormous safety to fast growing and changing electronic market. NSE has introduced the concept of a clearing corporation, by which the counterparty risk of each member is taken by NSCC and the financial settlement guaranteed by the Corporation. Counterparty risk is being guaranteed through the tight risk management system and an innovative method of on-line position monitoring and automatic disablement. NSE introduced this system of automatic disablement to control grave risks. Under this system

each broker of NSC is given a limit up to which he can trade. This limit is fixed in relation to the money he deposits with NSC or its clearing corporation. This money can be cash or pledge of securities or Bank Guarantee. Currently the limit is 8.5 times the money deposited. The trading system works in such a way that the broker gets warning messages after he crosses 70% of his trading limit and the moment he reaches 100% of his limit NSE computer disconnects all his terminals from the system so that he cannot trade further. He is allowed to trade again only when he brings additional deposits or authorise NSC to reduce his trades either by selling or buying on his behalf. NSE Milestones
November 1992 April 1993 May 1993 June 1994 November 1994 March 1995 April 1995 June 1995 July 1995 October 1995 April 1996 April 1996 June 1996 November 1996 November 1996 December 1996 December 1996 December 1996 February 1997 November 1997 May 1998 May 1998 July 1998 August 1998 February 1999 April 1999 October 1999 January 2000 February 2000 June 2000 September 2000 November 2000 December 2000 June 2001 July 2001 November 2001 December 2001 January 2002 May 2002 October 2002 January 2003 June 2003 August 2003 Incorporation Recognition as a stock exchange Formulation of business plan Wholesale Debt Market segment goes live Capital Market (Equities) segment goes live Establishment of Investor Grievance Cell Establishment of NSCCL, the first Clearing Corporation Introduction of centralised insurance cover for all trading members Establishment of Investor Protection Fund Became largest stock exchange in the country Commencement of clearing and settlement by NSCCL Launch of S&P CNX Nifty Establishment of Settlement Guarantee Fund Setting up of National Securities Depository Limited, first depository in India, co-promoted by NSE Best IT Usage award by Computer Society of India Commencement of trading/settlement in dematerialised securities Dataquest award for Top IT User Launch of CNX Nifty Junior Regional clearing facility goes live Best IT Usage award by Computer Society of India Promotion of joint venture, India Index Services & Products Limited (IISL) Launch of NSE's Web-site: www.nse.co.in Launch of NSE's Certification Programme in Financial Market CYBER CORPORATE OF THE YEAR 1998 award Launch of Automated Lending and Borrowing Mechanism CHIP Web Award by CHIP magazine Setting up of NSE.IT Launch of NSE Research Initiative Commencement of Internet Trading Commencement of Derivatives Trading (Index Futures) Launch of 'Zero Coupon Yield Curve' Launch of Broker Plaza by Dotex International, a joint venture between NSE.IT Ltd. and i-flex Solutions Ltd. Commencement of WAP trading Commencement of trading in Index Options Commencement of trading in Options on Individual Securities Commencement of trading in Futures on Individual Securities Launch of NSE VaR for Government Securities Launch of Exchange Traded Funds (ETFs) NSE wins the Wharton-Infosys Business Transformation Award in the Organization-wide Transformation category Launch of NSE Government Securities Index Commencement of trading in Retail Debt Market Launch of Interest Rate Futures Launch of Futures & options in CNXIT Index

June 2004 August 2004 June 2005 November 2006

Launch of STP Interoperability Launch of NSE's electronic interface for listed companies Launch of Futures & options in BANK Nifty Index NSE awarded 'Derivative Exchange of the Year', by Asia Risk magazine

As we can see that the stock exchange is now seen increasingly for what it really is, namely an essential financial infrastructure for any economy. It is this view of the exchange as infrastructure that motivated the Indian government to encourage the establishment of the National Stock Exchange of India at Mumbai, which in a few short years completely revolutionized the Indian capital market. The transparency of the price discovery process which results, especially in technology driven stock exchanges encourages participation in economic activity and enhances the efficient utilization of resources. In addition, the stock market is increasingly perceived as an electronic marketplace for buyers and sellers of securities to transact their business, under the full view of observers.

MARKET CLOSED as on Jan 12, 2011 16:00:06 hours IST

Index

Current

Pts % Change Change

S&P CNX NIFTY

5863.25 109.15 1.90 %

CNX NIFTY JUNIOR 11501.40 179.60 1.59 % CNX IT BANK NIFTY INDIA VIX CNX 100 S&P CNX DEFTY S&P CNX 500 CNX MIDCAP NIFTY MIDCAP 50 CNX INFRA CNX REALTY 7324.05 129.55 1.80 % 11128.15 294.60 2.72 % 21.41 -0.92 4.12 %

5753.35 104.45 1.85 % 4506.95 103.50 2.35 % 4709.85 84.90 1.84 %

8377.40 117.35 1.42 % 2747.10 3244.90 341.85 56.20 2.09 % 28.05 0.87 % 12.20 3.70 %

Terms related to NSE

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Current Rates
Most active
SBIN ICICIBANK 2669.702.18% 1069.454.55%

TATAMOTORS1218.005.18% LT SPYL 1760.15-1.14% 47.50 58.33%

View all NSE most active shares BSE NSE Most active
Shekhawati SBIN TATASTEEL ICICIBANK 47.50 58.33%

2664.752.03% 649.30 0.26% 1068.904.47%

TATAMOTORS1216.404.83%

View all BSE most active shares BSE NSE Top gainers
SUZLON STER 53.65 12.95%

183.05 7.08%

TATAMOTORS1218.005.18%

ICICIBANK CAIRN

1069.454.55% 341.55 3.89%

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STER 183.05 6.49%

TATAMOTORS1216.404.83% ICICIBANK TCS HDFC 1068.904.47% 1135.503.28% 681.35 3.13%

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BAJAJ-AUTO 1286.95-1.44% LT 1760.15-1.14%

HINDUNILVR304.90 -0.99% TATAPOWER1360.15-0.78% DRREDDY 1669.40-0.09%

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Top losers
BAJAJ-AUTO 1286.70-1.52% LT 1759.90-1.43%

HINDUNILVR305.00 -1.29% CIPLA 345.65 -0.86%

TATAPOWER1356.60-0.86%

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NSE 52 week high


Company Current High

HINDZINCs 1417.551443.00

LUMAXINDs386.15 400.00 SANDESHs 320.95 332.70

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Company Current High

HINDZINCs 1413.551438.00 LUMAXINDs387.80 400.00 SANDESHs 321.35 329.90

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Company CurrentLow 1.10 4.20 3.70

BIRLAPOWER1.15 ASHCONIUL 4.20 KMSUGAR 4.85

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Company SANRAA SGN

CurrentLow 0.18 0.33 0.17 0.33 0.77

TELEDATAIT0.78

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SANDESH PVP 320.9514.87% 13.30 10.37%

ORCHIDCHEM292.3510.24%

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SUPERTEX SANDESH 1.23 13.89%

321.3513.77%

ORCHIDCHEM292.5510.17%

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SPYL

47.5058.33%

ANTGRAPHIC0.40 14.29% SUZLON 53.6512.95%

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Shekhawati 47.5058.33% KISAN 44.3519.70%

CONFIDENCE18.2519.67%

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S&P CNX Defty 4506.95 2.35% CNX Nifty Junior 11501.40 1.59% NIFTY (S&P CNX)5863.25 1.90% CNX Midcap 8377.40 1.42%

S&P CNX 500

4709.85 1.84%

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DOL200 DOL100 SMLCAP 892.17 2.11% 2336.692.11% 9147.631.42%

BSE REALTY2582.363.27% BSE Power 2856.240.74%

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DOL200 DOL100 SMLCAP 892.17 2.11% 2336.692.11% 9147.631.42%

BSE REALTY2582.363.27% BSE Power 2856.240.74%